Explainer: The new mobile payments app set to rival Revolut

The development of the service is aimed at creating an industry-wide banking payments app to rival Revolut.

Mobile payments have become a growing part of how many consumers carry out transactions. As more and more people turn to mobile payments and banking, mainstream banks are keen to be involved in the market.

The announcement of a new mobile payments service called Synch marks the arrival of the traditional banks to the mobile payments sector.

Established in 2020, Synch Payments is a joint venture between AIB, Bank of Ireland, PTSB and KBC.

The development of the service is aimed at creating an industry-wide banking payments app to rival Revolut.

With over 1.7m customers in Ireland, Revolut dominates the mobile payments landscape. However, with the arrival of Synch, the mainstream banks look set to challenge Revolut’s hold on the market.

Other FinTech banks set to be challenged by the launch of Synch include N26, Bunq and Zumo.

What services will Synch offer? 

The mobile app will allow consumers to send money to friends and family, as well as enabling customers to complete retail and e-commerce transactions.

Synch states that the development of the mobile app will simplify the way people make and receive payments. Users will not need to provide an IBAN or card number in order to pay someone. Instead, they will only need a phone number in their contacts.

Payments are received instantly even if the person you are sending money to is with a different bank.

Speaking to the Irish Examiner, Niamh Kennedy, head of brand and marketing, Synch Payments said the Synch app "makes it more convenient and more secure now to make payments to friends, family and businesses".

The mobile payments service will be available to customers of banks and other financial institutions participating in Synch.

The app will provide consumers with instant person-to-person payments. It will also facilitate instant person-to-business payments services which can be used by online merchants on their websites, or in retail outlets through the use of QR codes, to enable customers to pay for goods and services.

Kennedy said the Synch app will mean: "there will be no more need to enter in your card details, your card number, your expired or your CVV on to websites and you won't have to produce your plastic card at the till in-store. You'll be able to do everything from your mobile device."

While a number of traditional banks are involved in founding Synch Payments, it is hoped that credit unions will become part of the system as well. "The service is open to any authorized financial institution in Ireland that provides an IBAN for Irish consumers to license," Kennedy stated.

Competition watchdog ruling 

The four banks initially notified the Competition and Consumer Protection Commission (CCPC) of their plans in January 2021.

However, that proposal was almost immediately rejected, when the watchdog took the unusual step of ruling that the proposers had failed to provide it with sufficient information.

On April 8 2021, the watchdog said it had been re-notified by AIB, Bank of Ireland, PTSB, and KBC. On May 19, the CCPC asked the notifying parties for further information.

The watchdog then carried out a preliminary investigation of the proposed joint venture and concluded that a full investigation was necessary to establish if it could result in a substantial lessening of competition in the State.

The CCPC’s full investigation identified a number of preliminary competition concerns. In response to the watchdog's concerns, the banks agreed to make several binding commitments to the CCPC.

Each year, Synch and the founding shareholders must report to the CCPC on their compliance with the commitments.

Following this, the watchdog determined that the creation of Synch Payments would not substantially lessen competition. As a result, the joint venture between the banks was cleared.

It is understood that objections to the proposed mobile payments service were submitted by both PayPal and Revolut.

Speaking yesterday after Synch was cleared by the CCPC, Inez Cooper, Managing Director, Synch said: “The Synch app provides a secure, instant and frictionless experience for consumers while also ensuring a seamless connection directly to their existing banking provider, delivering efficiencies for businesses."